Overview
The Sanctions Update is compiled by Steptoe’s International Trade and Regulatory Compliance team and Steptoe’s Strategic Risk team. You can subscribe to receive the Sanctions Update every week through Steptoe’s International Compliance Blog and Stepwise Risk Outlook publication home pages.
For more information or advice on any of the developments discussed below, please contact a member of our sanctions team here.
US Developments
US Imposes New Sanctions on Iran Amid Crackdown on Protests
On January 15, OFAC announced sanctions against senior Iranian security officials it said were the “architects of the Iranian regime’s brutal crackdown on peaceful demonstrators.” OFAC also designated 18 individuals and entities that allegedly play critical roles in laundering proceeds from Iranian petroleum and petrochemical sales as part of a “shadow banking” network.
OFAC also took action against individuals, entities, and vessels it determined were providing support to Iranian terrorist proxies:
- On January 13, OFAC, in coordination with the Department of State, sanctioned the Egyptian and Jordanian branches of the Muslim Brotherhood for their support of Hamas. On the same day, the Department of State designated the Lebanese Muslim Brotherhood as a Foreign Terrorist Organization (FTO) and Specially Designated Global Terrorist (SDGT), and the group’s leader, Muhammad Hawzi Taqqosh, as an SDGT. The designations follow an executive order (E.O.) issued by President Trump on November 24, 2025, which called for certain branches of the Muslim Brotherhood to be designated as FTOs and SDGTs.
- On January 16, OFAC designated 21 individuals and entities, and identified one vessel as blocked property, that OFAC alleges to have transferred oil products, procured weapons and dual-use equipment, and provided financial services for Ansarallah, an FTO and SDGT more commonly referred to as the Houthis. These included individuals and entities in Yemen, Oman, and the United Arab Emirates (UAE).
Protests have erupted across Iran over the past three weeks, largely a result of the rapidly weakening value of the rial, Iran’s currency, and soaring inflation. Reports indicate that thousands, potentially tens of thousands, have died in the violent crackdowns against the protests. President Trump has repeatedly expressed support for the protestors and warned that perpetrators of violence would pay a “big price.” Iranian elites have reportedly wired large sums of money out of the country, which Secretary of the Treasury Scott Bessent said the Treasury Department will trace.
The US may continue to sanction the Iranian regime, its terrorist proxies, and their supporters in the coming days and weeks. Most notably, on January 12, President Trump announced a 25% “secondary” tariff on any country “doing business with” Iran that would be “[e]ffective immediately[.]” The White House has not yet detailed the specifics of the tariff or issued a new executive action on the matter. It is possible that the Trump administration may move to implement the tariffs soon if the situation in Iran worsens.
US Extends License for Sale of Lukoil’s Assets
On January 14, OFAC issued General License (GL) 131B, “Authorizing Certain Transactions for the Negotiation of and Entry Into Contingent Contracts for the Sale of Lukoil International GmbH and Related Maintenance Activities.” The license replaces GL 131A, which was set to expire on January 17, and extends its term until February 28. More specifically, GL 131B extends the authorization for certain transactions prohibited by EO 14024 that are ordinarily incident and necessary to the negotiation of and entry into contracts with Lukoil or any of its affiliates for the sale, disposition, or transfer of Lukoil International GmbH (“LIG”) or any entities it owns 50 percent or more.
Lukoil has reportedly fielded interest from a variety of potential buyers, including Carlyle, UAE-based International Holding Company, Saudi Arabia’s Midad Energy, and a joint bid from Chevron and Quantum Capital Group. The assets, which include retail gas stations, refineries, and oil fields, are worth approximately $22 billion.
UK Developments
UK Announces Increased Sanctions on Iran
The UK and the EU have signalled a coordinated escalation of sanctions against Iran in response to the Iranian government’s violent actions regarding the present civil unrest within the country. In a statement to Parliament the UK Foreign Secretary, Yvette Cooper, confirmed that the UK will bring forward legislation to introduce further sanctions and sectoral measures targeting Iran’s finance, energy, transport and software sectors, as well as other industries linked to Iran’s nuclear escalation. The UK will also work closely with the EU and other international partners to align action. For businesses, the announcements point to near-term regulatory change and heightened Iran-related sanctions risk.
UK Publishes Outlook Briefing on Iran
The House of Commons Library has published an outlook briefing assessing how recent sanctions developments may shape Iran’s position in 2026. The briefing notes renewed protests in Iran since December 2025 and recalls that, following the violent suppression of earlier protests, the UK added eight individuals to its Iran sanctions list. It also highlights the economic impact of sanctions, citing World Bank projections that Iran’s GDP will contract by 2.3% in 2026, attributed in part to international sanctions and the reimposition of UN measures in September 2025. Those UN sanctions, which had been suspended under the 2015 nuclear deal, were restored after the UK, France and Germany triggered the snapback mechanism in response to Iran’s “significant non-performance.” The briefing explains that the renewed UN measures target Iran’s nuclear and missile programmes, alongside broader UK, EU and US sanctions across the Iranian economy. The outlook cautions, however, that enforcement may be uneven: Russia does not recognise the restored UN sanctions and China continues to purchase Iranian oil. The briefing also points to Iran’s efforts to mitigate sanctions through cooperation with Venezuela, although this may be disrupted following recent developments involving the interception of the “Bella 1” vessel, underscoring ongoing uncertainty for businesses exposed to Iran-related sanctions risk.
UK Lowers Oil Price Cap on Seaborne Russian Crude Oil
The UK has announced a further reduction to the Oil Price Cap on seaborne Russian crude oil, acting in coordination with the EU. The cap will be lowered from $47.60 to $44.10 per barrel, taking effect at 23:01 GMT on January 31, 2026. The measure applies across all services caught by the Oil Price Cap, including maritime transportation, brokering, and the provision of financial services or funds linked to the maritime transport of Russian crude from Russia to third countries or between third countries. The change is intended to further restrict Russian oil revenues while maintaining alignment with allied sanctions frameworks. To allow businesses time to adjust, contracts entered into before 23:01 GMT on January 31, 2026, that comply with the existing $47.60 cap may benefit from a wind-down period ending at 22:59 BST on April 16, 2026, after which point the lower cap will apply from February 1, 2026. The UK has updated its Oil Price Cap guidance, General Licence INT/2024/4423849 (the “Oil Price Cap GL”), and FAQs 154 to 161 to support industry during the transition. Market participants must continue to comply with existing reporting and attestation obligations under the Oil Price Cap GL, and UK businesses involved in shipping, insurance, finance or trading should review contracts and compliance processes in light of the revised cap.
EU Developments
EU court Advocate General opinion in National Settlement Depository appeal on meaning of support for the Russian Government
Advocate General Medina (the Latvian AG) has published her non-binding opinion in Case C-801/24, the Russian National Settlement Depository’s appeal against the General Court’s judgment (Case T-494/22) to uphold its original listing and relisting on the EU sanctions list under Regulation (EU) 269/2014.
The opinion addresses the interpretation of Article 3(1)(f) which allows the listing of people/entities “supporting, materially or financially, … the Government of the Russian Federation”. The opinion confirms that “support” is not limited to direct supply of material resources, but any support that, by its quantitative or qualitative importance, is capable of providing the Russian Government with resources or facilities enabling it to pursue its actions to destabilize Ukraine. Accordingly, the opinion finds that NSD’s designation was not disproportionate.
EU to lower price cap on Russian oil from $47.60/bbl to $44.10/bbl starting on February 1
The Council of the EU has decided to lower the price cap on Russian oil, above which EU companies are prohibited from being involved in its transportation and providing associated services, from $47.60 per barrel to $44.10 as of February 1. The price cap will be subject to regular review every six months by the Commission, although extraordinary reviews are possible where duly justified by developments in the oil markets or other unforeseen circumstances.
EU renews Guatemala sanctions regime for one year
The EU Council of the EU has renewed targeted measures imposed by the EU against those responsible for actions undermining democracy, the rule of law, and the peaceful transfer of power in Guatemala for one year, until 13 January 2027. Currently, these EU restrictive measures apply to eight individuals and one entity.
The EU is discussing the imposition of additional sanctions on Iran
EU foreign affairs ministers are due to discuss sanctions proposed by the European Union’s foreign policy chief Kaja Kallas at their next meeting on January 29. The proposed measures address the violent crackdown on protesters. The measures appear to have been discussed in the context of G7 meetings, and therefore a coordinated approach by the United Kingdom and the United States could be taken.
Asia-Pacific Developments
Private Sector Stakeholders Urge Easing of Seoul’s Sanctions on North Korea
On January 14, 2026, a group of South Korean companies with investments in inter-Korean economic cooperation projects publicly called on the government to lift the unilateral sanctions that have blocked most cross‑border commercial activity with North Korea. Representatives from ten investor organizations, including groups tied to the Kaesong Industrial Complex and the Mount Kumgang tourist zone, stated that the measures have effectively cut off all lawful avenues for private‑sector engagement with North Korea and left long‑standing ventures dormant. They noted that the restrictions, first enacted following the 2010 sinking of the South Korean naval vessel Cheonan, have continued to impede economic cooperation despite North Korea’s growing exchanges with China and Russia, and urged the government to reopen channels that would permit businesses to resume authorized activities.
Sanctions Relief Identified as Key Requirement for North Korea’s Reengagement with the United States
On January 17, 2026, former US nuclear envoy Joseph Yun said at the South Korea-US Alliance conference that North Korea would likely condition any return to talks with Washington on securing sanctions relief and achieving a level of de facto acceptance of its nuclear arsenal. Yun added that, despite continued US interest in engagement, North Korean leader Kim Jong-un appears unwilling to resume negotiations, pointing to factors such as Pyongyang’s overseas troop deployments, cyber-enabled revenue generation, and lingering frustration from the 2019 Hanoi summit. He emphasized that South Korea remains indispensable to any diplomatic progress, stressing that the United States cannot pursue meaningful talks with Pyongyang without Seoul’s involvement.
Malaysia Balances Iran Ties Against United States Sanctions Pressure
On January 20, 2026, Malaysian Prime Minister Anwar Ibrahim stated that Malaysia would continue its diplomatic relations with Iran, despite Tehran remaining subject to extensive US sanctions and a new warning from Washington that countries engaging economically with Iran could face a 25 percent import tariff. Malaysia does not conduct direct trade with Iran and instead relies on intermediaries due to existing US sanctions. Anwar told Parliament that he had already communicated with Iranian officials and stressed the need for Malaysia to act with “wisdom in international relations,” adopting a measured approach that preserves national interests while managing the evolving United States posture.
